Euro Climbs on Softer US Data, Fed’s Wait-and-See Stance

On Thursday, the Euro gained versus the US dollar, but obstacles still exist. The poor US data, which included an unexpected increase in jobless claims and a widening trade deficit that raised questions about the real state of the US economy, helped the shared currency.

Treasury yields dropped as a result of a decline in the demand for US debt, which also made the dollar less appealing. Fed members, such as Harker and Barkin, have expressed concerns about inflation and the possibility that interest rates may remain high for an extended length of time. The Fed is reticent to decrease rates.
Eurozone Gains Traction
Favourable service industry PMIs: The Euro’s value was strengthened by the Eurozone’s stronger economic activity. Market anticipation of a possible June rate decrease by the European Central Bank contrasted with the Federal Reserve’s wait-and-see approach.
EUR/USD Price Outlook
The 100-day moving average (DMA) is a point of resistance for the currency pair, which is now trading at 1.0858. Further Euro gains towards 1.1000 may be possible if a breach occurs above 1.0875 and 1.0900. On the other hand, a drop below 1.0833 (the 200- and 50-DMA confluence) might cause the price to drop to 1.0800.

The Fed’s cautious posture and the poor US statistics are helping the Euro, but resistance at the 100-DMA may prevent further gains. Future ECB policies and the Eurozone’s economic performance will be important things to keep an eye on.